March 19, 2012 Volume 4, No. 2
This edition of Currents is from Eric L. Dobberteen, Esq., a member of the litigation and white collar crime practice teams. Please contact Eric Dobberteen to inquire about the subject matter of this issue.
Bribe?!? What Bribe?!? - Continued
Part one of this three part series shows that the Department of Justice (DOJ) interprets the Foreign Corrupt Practices Act (FCPA) broadly and that this can lead to United States businesses unintentionally engaging in behavior that might be construed as bribery under the FCPA.
Read part two below to see why businesses without a compliance program might consider paying attention to the FCPA now.
PART ONE: What is the FCPA?
PART TWO: Why Worry About the FCPA Now?
PART THREE: Can Trouble With the FCPA Be Avoided?
Why worry now about a 34-year old statute, especially if your company has been exporting over the years without a problem and without paying any real attention to the FCPA? The reason, quite simply, is that the federal government has announced a "new era of FCPA enforcement" with "aggressive" enforcement that is "here to stay". For instance:
In April and May 2011, a Los Angeles federal court jury heard evidence against a small privately-held company founded in 1947 and based in Azusa, California, that was indicted along with its President and one other executive, for violating the FCPA by funneling millions of dollars of bribes to two officials of the Comisión Federal de Electricidad, an electric utility company that is wholly-owned by the Mexican government. After hearing several weeks of testimony, the jury convicted the company and the two executives. This was one of the few cases under the FCPA to actually go to trial. Upon conviction, the Company faced fines of at least $2,000,000 along with possible debarment and/or suspension from obtaining government contracts. The individual defendants faced five year prison terms and fines of $100,000 each. Fortunately, for the defendants, the court eventually threw out all the convictions and dismissed the case. That’s not because the judge found legal problems with the FCPA. The case was dismissed because of government misconduct – a result that is very rare. These defendants were incredibly lucky; future ones won’t be.
Continue to Part Three: Can Trouble With the FCPA Be Avoided?
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